Question

Suppose today is January 1st, and you have planned to invest $12,000 at the end of this year, $14,220 at the end of the second year, and $15,600 at the end of the third year. If you can earn a 14% rate of return in each year, what is the future value of this stream of cash flows at the end of 4 years?

Answer 1

Answer:

The future value of this stream of cash flows at the end of 4 years $54,042.84

Explanation:

FV =  C° * (1+r) ∧ n =

At the end of the year 1 =  $12,000 (1+0,14) ∧ 3= $12,000 * 1.48= $17,778.53

At the end of the year 2 =  $14,220 (1+0,14) ∧ 2= $14,220 * 1.30= $18,480.31

At the end of the year 3 =  $15,600 (1+0,14) ∧ 1= $15,600 * 1.30= $17,784.00

$17,778.53+ $18,480.31 + $17,784.00  =  $54,042.84